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Truly innovative
small businesses and startups create a bold vision of a future
that doesn't exist yet, solving problems that customers don't
even know they have. But they don't pull that vision out of thin
air -- many inventive companies use a strategy called design thinking.

"Design thinking is a problem-solving approach," says Jeanne
Liedtka, a design and innovation expert at University
of Virginia's Darden School of Business. "It's a set of tools
that help you make decisions in the kinds of high uncertainty
situations that entrepreneurs face."

While business schools typically emphasize market research and
data, design thinking focuses on real world interaction and
experimentation. Many entrepreneurs naturally use ideas from this
approach, but it's typically taught at design schools as a
process for creating new products.

Using a design-thinking approach, entrepreneurs become
anthropologists, studying the customers they hope to serve and
using that knowledge to get simple prototypes into their hands
quickly. "The power of a design thinking approach is that you get
deep insight into customer needs," Liedtka says.

Design thinking can also be a way to get off the ground when all
you have is a vague idea. "The structure of design thinking
really helps when you have no clue how to begin," Liedtka says.
It helps you explore and guides you to find problems that need to
be solved.

Liedtka breaks the design-thinking process into four stages,
assigning a core question to each of them. Try asking yourself
these questions as you create a new product or business:

1. What is the opportunity?
The first step
in the design-thinking process is to understand the solutions
that already exist for the problem you're trying to solve or the
group you want to help. "Design thinking starts with identifying
an area of opportunity, not a solution," Liedtka says.

To do that, observe real people in their natural environment. For
example, if you want to create a better tablet, watch a small
group of 10 to 12 people using their current tablets in daily
life. What do they like? What annoys them? What workarounds do
they use to overcome design flaws? Those answers will highlight
problems your customers don't even know they have -- problems
that you can solve.

2. What if?
In the second stage, start to imagine solutions. Take the list of
needs you discovered in the field, then brainstorm as many ways
to meet those needs as possible. Let yourself get creative here
-- assume that anything is possible.

"The ideas you'll come out with aren’t blue sky made up ideas,"
Liedtka says. "They're inspired by needs you've identified." By
limiting the brainstorm process in that way, you increase the
chances of finding a viable solution and creating a successful
product.

3. What wows?
Once you've exhausted all the possible solutions, think
practically about which ones are most likely to work. "You're
looking for the wow zone," Liedtka says. "That's the intersection
of something that customers want, that you can create, and that's
likely to have a profitable business model associated with it."

At this point, you're bringing more structure and data to the
design process, essentially making a traditional business case
for each of the options. With that lens, narrow your ideas down
to a handful of viable options, some safe and some adventurous.

4. What works?
Finally, create prototypes for each of those options and bring
them back to the customers you observed at the beginning. Each
prototype should be extremely simple, allowing you to watch and
hear their reactions with minimal investment.

After your observations, take the feedback and iterate, creating
another round of simple prototypes to test. "Small experiments
are the way you fail, or ideally succeed, fast and cheap,"
Liedtka says. By the time you bring the product to market, you'll
have more confidence in its chances of success.